Get more of what you want (+ less of what you don't) with stock & flow analysis

17 Feb

Are you (by chance) low on energy, money or another essential resource?

Here’s a new way to think about resources, and how to increase the ones we want more of.

Stocks and Flows

A ‘stock’ is an accumulation of a resource. The resource could be energy, health, money or body fat: anything that can increase or decrease over time is a stock.

A ‘flow’ is the movement of that resource.

There are only two ways that resources flow:

Into a stock; and

Out of a stock.

Flows cause fluctuations in stocks. When there is more flowing out of a stock than in, the stock gets smaller. When there is more flowing in than out, the stock increases.

Simple, right?

To help us picture it, we can draw a diagram like this:

The flows have pink valves, or ‘taps’, for adjusting the volume of the flow.

The taps that control the rate of flow are an excellent place to focus our energy. That’s where we can make adjustments that, in time, will affect the size of a stock.

In other words, if we want more (or less) of a given resource, we need to focus on adjusting the inflows and outflows.

Um, clouds?

Let’s not worry about the clouds. They represent the places where the flows of resources come from and go to (usually other stocks).

Today we’re going to keep things simple and ignore them.

Right. Flows?

Usually there isn’t just one big inflow and one big outflow for a stock (though sometimes there is). More typically there are multiple inflows and outflows:

If the stock is our energy, the inflows could be sleep, healthy food, appropriate exercise and (maybe) joy or social connection. The outflows could be work, domestic tasks, conflict and (of course) the energy that is required to run our brain and body each day.

Inflow

Using this example, to increase my stock of energy, I can:

Sleep more (thereby increasing the inflow of the various positive benefits of sleep);

Make sure the nutrient density of my food is high (thereby increasing the inflow of micronutrients);

Walk more (thereby increasing the inflow of the benefits of appropriate movement); and

Have more fun (thereby increasing the inflow of joy).

Outflow

To increase my stock of energy, I can:

Stop working and doing domestic tasks. Just kidding! Since I have to work and do chores, I can focus on finding ways to do them more efficiently so the outflow of energy is reduced. I can also try to have more fun while I do these things, thereby increasing the inflow of joy to my stock of energy, even as I am drawing on it.

Address the conflict in my life in a constructive way.

Stocks of Feelings

Do feeling accumulate in stocks? They certainly can. ‘Goodwill’ is an example of a feeling that can accumulate as a stock.

For example, for the feeling ‘goodwill toward humanity’, Matthew’s inflows and outflows look like this:

Someone else might have different inflows and outflows for the same stock. Spending time on social media is an outflow for Matthew, but might be an inflow for you: it might help you to feel connected with and in love with humans everywhere.

So, like many other things, inflows and outflows can be individual.

What’s Actionable?

When we are trying to change something (anything) the important question is always the same: what’s actionable?

The rate of flow to a stock is actionable if we can adjust it. Therefore, any flow that we can adjust is a place to focus our attention.

Matthew can increase the time he spends taking photographs and decrease the time he spends on social media. If he does that, his stock of goodwill toward humankind should increase. He can also listen to music while driving, which should have the same effect.

How Fast?

Stocks usually change slowly. Donella Meadows, systems theorist, explained that “a stock takes time to change, because flows take time to flow”.

According to Meadows, understanding the behaviour of stocks helps us to anticipate the behaviour of systems. She explains that “stocks generally change slowly, even when the flows into or out of them change suddenly. Therefore, stocks act as delays or buffers or shock absorbers.”

Sometimes we make changes but don’t see results right away. Here's the reason: stocks change slowly.

Once we have made appropriate adjustments to inflows or outflows, we need to be patient and allow the level of any given stock to change.

Beware: our Tendencies

Donella Meadows pointed out that humans tend to focus on stocks rather than flows. She also noted that when we do think about flows, we think about inflows more than outflows.

In other words, we might forget that we can increase a stock by slowing an outflow, as well as by increasing an inflow. If we are trying to increase the stock of money in our bank account, we can concentrate on ways to reduce the amount of money that is flowing out, rather than just trying to increase the flow of money in.

Being aware of this human predisposition, we can remind ourselves to look at the whole picture: inflow(s), stock and outflow(s), when deciding what adjustments to make.

Working with stocks and flows: a summary

If we want more (or less) of any resource, we need to focus on flows. Flows are where the action is.

So:

To increase a stock of any resources, increase one or more of the inflows and/or decrease one or more of the outflows by any amount.

To decrease a stock: decrease one or more of the inflows and/or increase one or more of the outflows by any amount.

If you are low on any essential resource, a stock and flow analysis can help, in time, to increase your stock of that resource.

Your health is a stock. What are the inflows and outflows for your stock of health? Which ones can you adjust?

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